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January 24, 2019 David Dyck

Chamber of Commerce & Board of Trade
Insurance

Directors & Officers insurance covers your Chamber of Commerce’s board, whose members may be held personally liable for financial losses, employee discrimination, and other risks. Buy Nonprofit Directors and Officers Liability insurance online in less than five minutes with Apollo.

Chambers of Commerce and Boards of Trade are nonprofits, and as such, face many of the risks that other nonprofits face. Anyone considering taking a position as a director or officer on a nonprofit board should consider the responsibilities involved. They could be held responsible for:

  • Failure to act as stated under a statute. In other words, all required reports and records must be properly kept and maintained. If they aren’t directors and officers could be held liable.
  • Noncompliance of the organization. If the nonprofit suffers a loss, an employee claims there is discrimination, or there is a wrongful dismissal of a staff member, directors and officers can be held personally liable.

If the chamber of commerce is unable to cover the costs of the lawsuit, the director could be required to pay out of pocket for legal fees, damages, or any settlement awarded.

It is important to note that neither ignorance nor resignation are reasonable defences. Not only that, but as a chamber of commerce or board of trade director, you could be held responsible for decisions made by past boards, even if you had nothing to do with them, or were not a board member at the time the decision was made.

Having a Directors and Officers Liability insurance policy can protect the individuals who give their time to the important work of running the chamber of commerce.

What types of insurance does a Chamber of Commerce or Board of Trade need?

Directors & Officers Liability – Directors & Officers insurance protects against losses caused by negligence or honest mistakes made by the directors and officers of your Chamber of Commerce. Not only will it cover any amounts your organization is required to pay should you lose a lawsuit, the insurance company will even pay for your legal fees and court costs.

General Liability – Commercial General Liability insurance — also known as CGL — is the cornerstone of any nonprofit’s business’ risk management strategy. It protects an organization against liability claims that may arise from injuries or damage that could occur at the business itself, or caused by employees in the course of doing their job.

Contents & Assets – Every business owns property, and that includes nonprofits. Nonprofits spend a lot of money on tangible assets like equipment and inventory. Without contents insurance, you would have to pay out of pocket to repair or replace any damaged equipment. This could negatively impact your finances and any delays can be disruptive to your organization’s operations.

You can apply for and purchase all of these coverages for your Chamber of Commerce using our simple online application.

There are many other types of insurance which could be relevant to you personally or your nonprofit, make sure to speak with our team to learn more about your unique needs.

How a Directors & Officers policy responds

Here are two scenarios of how a Directors & Officers insurance policy would respond to protect a Chamber of Commerce.

 

The disgruntled member

The Chamber of Commerce’s board of directors makes a decision to allocate funds to a charity, without realizing that the charity is not local. One of the chamber’s members hears about it, and sues the board for misuse of funds for operating outside of their charter. The Directors & Officers Liability insurance policy would respond to cover the legal expenses of the board, as well as any award or settlement.

 

The publishing problem

The Board of Trade decided to run a monthly newsletter that was distributed to the community. As part of the added value, the board sold adds in the publication at a discount to local merchants. A new clothing store opened and put in a last minute request for an ad in the publication. But when the next issue came out, the store’s ad was missing.

The board member who was supposed to process the request had forgotten, though the chamber kept the fee. The store responded by suing the Board of Trade for breach of fiduciary duty and breach of contract.

The Board of Trade’s D&O liability insurance policy responded to cover the legal expenses incurred in defending the case, and the resulting award or settlement.

Additionally, in the digital age we live in today the collection and storage of client information leads to cyber risks such as personal or confidential data being exposed by accident or by hacking. Something as simple as losing a USB key with a spreadsheet of client data stored on it can have large risk implications for a consulting business.

A lawsuit, regardless of fault,
can be costly to defend.

What types of risks do I face as a Chamber of Commerce or Board of Trade?

Like all nonprofits, Chambers of Commerce and Boards of Trade face a diverse set of risks at the board and operational level. There is the possibility of accusations that the directors aren’t fulfilling their duties, mismanaging the organization or funds, discriminating against a volunteer, or risks to do with managing and dismissing employees. Directors and officers of nonprofit organizations can be held personally liable for their decisions on the board, even if the nonprofit is incorporated.

Bodily injury can occur at events hosted by the Chamber of Commerce, even a simple slip and fall can lead to a lawsuit. The physical assets of the organization have risks of loss such as fire, theft, flood, water damage and more. Collecting donor data and other personal information about volunteers or staff leads to an emerging set of cyber risks.

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